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Strategic Objectives:

To start your Strategic Plan, first set Strategic Objectives. These are the big picture goals for the business to achieve in 3 to 5 years. First, be very clear on your target markets, by segment and geography. Then, set your goals. Be ambitious. Goals should be a stretch and attainable.

Possible areas are:

  • Total sales
  • Market share by segment
  • Sales by segment
  • GP%
  • ROI or ROS

You, as the leader, can set the objectives or you can involve your team. Strategic Objectives need to be measurable and date driven.

Strategic Plan:

A Strategic Plan needs to have four interacting components:

  1. Resources – how you’ll attain a presence in your target market
  2. Differentiators – how you’ll win in the market
  3. Implementation – the timing and sequence of your moves
  4. Economic logic – increasing profit

Let’s look at each of these in more detail.

Resources:

All of the tools you’ll utilize to attack the market:

  • Staff
  • Product Lines and Vendor Partners
  • Vehicles and Equipment
  • Facilities
  • Machinery
  • Technology

Differentiators:

You need to differentiate yourself somehow in the market from your competition. If you are the low cost provider, you can use price as a differentiator. More effectively, you can offer value added services. You can also utilize advertising, marketing and branding. I suggest that you focus on value added services that your competition doesn’t offer. First, meet with your team to come up with a list of the unique services you already offer. Some call this your Value Proposition. As part of your strategy, decide if there are additional services you would like to offer. You’ll then need to circle back to Resources to see if there are additional resources you’ll need to provide these new services.

Implementation:

This is where you put together your timeline. You can’t do everything at once, so it’s important to map out each step over time. Make sure not to overextend. Narrow your focus and take on only one or two new initiatives at a time.

Different steps in the process may include:

  • Recruiting and training new staff
  • Improving processes
  • Implementing new technology
  • Bringing on new product lines
  • Purchasing vehicles and equipment
  • Upgrading your facilities
  • Calling on new markets
  • Working with vendor partners
  • Offering training to customers
  • Promotions and specials
  • Advertising and marketing

Once you’ve established your timeline, it’s important to assign accountability for each action step to someone.

Economic Logic:

Run an economic forecast or budget for the next twelve months showing the changes in sales, gross profit, expenses and investment. If you have a three-year plan, I recommend doing a forecast for each year. Do your best to estimate as accurately as possible the expenses, including salaries, leasehold depreciation, vehicle leases, sales expense, advertising expense, and the cost of capital (interest expense or dividends to investors). If your execution is done properly, you’ll grow your gross profit faster than your operating expenses. The goal is to achieve a leverage ratio of two or more, with gross profit growing at twice the rate of expense growth.

Alignment:

After you’ve articulated your Vision Statement and Strategic Plan, it’s important to share these with you team. The goal is to make sure that everyone is in alignment.

There are four steps in the process:

  • Awareness – You took this step when you communicated to the team that you would be working on a Vision Statement and Strategic Plan for the business.
  • Involvement – You involved the team in developing the Vision Statement and Strategic Plan. It’s important for them to feel part of the process and be one of the authors.
  • Alignment – This is the critical step where you are now. Make sure that all team members are in agreement with and supportive of the Vision Statement and Strategic Plan. Ask if anyone has concerns, doubts or questions and make sure to address all of these. Be open to making changes to the plan. It’s critical that everyone is “rowing in the same direction.”
  • Acceleration – You’re not there yet. When you start to implement the Strategic Plan and the team gets excited and enthusiastic about it, you’ll move into acceleration. It will be important to set interim goals and celebrate their achievement along the way. Success breeds success. When you reach acceleration, the team will start to set and achieve their own stretch goals.

Year One Action Plan:

Your Strategic Plan is a three to five year big picture plan. You’ll need to break it down into bite sized chunks. Based on your Implementation, identify the key action steps you’ll need to take during the first year of the plan.

Utilizing an Action Plan template, write out these key components for each action step:

  • Specific Objective – must have a measurable outcome by a specific date
  • Accountability – one person who will be taking the action or making sure it happens
  • Specific Action to be taken – must have a time element
  • Follow-Up – how often will the leader follow up with the person accountable and by what means?
  • Results – have a space to note the actual measurable results on the due date. If you don’t achieve your objective, decide on a new action step to reach the objective at a future date.

Then start taking actions, following up and celebrating your successes along the way!